Australian Uranium and India: Ideology Versus Pragmatism

As Australia and India push to take their relationship to a new level, Australia's refusal to sell uranium to India remains a contentious unresolved issue. Can this policy be sustained under the new regime of climate change, the renaissance of nuclear energy, India's economic growth, and the growing bilateral relations between two democracies? At an Asia Program event on June 14, Asia Program Australian Scholar Edmond Roy outlined historical factors that have led to Australia's refusal to allow uranium exports to India, pointed out some inconsistencies in this position, and outlined factors that might induce Canberra to change its position.

Domestic and international factors have played into Australia's decision to refuse uranium sales to India. By the end of the Second World War, Australia had an active uranium mining industry and supported Britain's nuclear program by allowing the latter to conduct weapons tests in the Australian outback. Not surprisingly, then, the government in Canberra turned a deaf ear to Indian Prime Minister Jawaharlal Nehru's public calls in the late 1950s for Australia to join a nuclear disarmament framework.

Later the positions of the two nations regarding nuclear weapons were reversed. As an anti-nuclear movement gained strength in Australia, Canberra moved to ban uranium mining except where it was incidental to the mining of other minerals. This step was not as drastic as it sounds, as it still allowed for the development of the Olympic Dam, which while technically a copper mine, is also one of the world's largest deposits of uranium. India, meanwhile, departed from its earlier stance in favor of international disarmament, and refused to join the Nuclear Non-Proliferation Treaty (NPT) in 1968. In 1975, an Australian parliamentary committee recommended that Canberra refuse to sell uranium to non-signatories of the NPT, a position which successive Australian governments claim has informed their stance on uranium sales to India since then.

India contends that Australia has applied its ban inconsistently. Australia has sold uranium to Taiwan, which, because of its ambiguous status within the international community, is technically not a state party to the treaty. Australian claims, however, that as the representative of all of China in 1968, Taiwan did in fact sign the NPT, and has adhered to the treaty framework ever since. Since 1977, Australia has also sold uranium to France, which was not a signatory of the NPT until 1992. Canberra justified exempting France from the export ban by noting the significant degree to which French energy needs were dependent on nuclear power. However, the leverage France maintained over Australia's trade interests in the European Community was clearly a significant factor in Canberra's decision to allow the exports. While Australia banned sales of uranium to France in 1983 in response to the France's nuclear tests, it resumed exports again in 1986. Officials in New Delhi see very little distinction between the Indian and French cases, and view Australia's refusal to allow an exemption to India as hypocritical.

Despite the ban on uranium sales to India, there has been some movement in Canberra on this issue in recent years. In 2007, the Australian government, under John Howard, came close to reversing Australia's policy, but the election that year ousted Howard and brought to power the Australian Labor Party's (ALP) Kevin Rudd. Anti-nuclear sections of the ALP are still hostile to the notion of uranium exports to India. The Rudd government ruled out a reconsideration of the policy.

However, a number of international factors make a reconsideration of the ban increasingly likely. First, the 2007 decision by the United States to supply uranium to India was a major factor in the Howard government's shifting position on the issue. Under the deal signed with the United States, India agreed to adhere to safeguards stipulated by the International Atomic Energy Agency and the Nuclear Suppliers Group (NSG), which represents uranium exporting nations. According to officials in both New Delhi and Canberra, Australia's decision as a member of the NSG to allow the United States to export uranium to India, while foregoing its own exports, seems strange in the least.

The second factor is India's impressive growth rate, which will have a significant impact on the Australian economy. According to the Indian Planning Commission, an economic growth rate of around 8 percent per annum over the next 25 years is essential for attaining basic goals such as lifting a sizable section of the nation's rapidly growing population above the poverty line. Australia's exports in goods to India expanded at an annual average of 32 percent over the five years to 2007, the fastest growth of all of Australia's major markets. Helping India to successfully maintain its growth is in Australia's own economic interests.

Third, in response to widespread international concerns about climate change, nuclear power has emerged as an increasingly attractive alternative to fossil fuels. India is likely to be aversely affected by climate change, which may lead to erratic monsoons with serious impact on agriculture, rivers, water, and power supply. With India's power generation set to increase as its economy grows, New Delhi is likely to call for more uranium to power a "clean" civilian nuclear program. The Rudd government has also taken a more progressive stance on climate change and environmental issues than its predecessor, and is likely to be more susceptible to arguments related to reducing India's environmental footprint.

According to Roy, Australia therefore needs to reconsider its position for its own sake. Indian High Commissioner to Australia Gopalapurum Parthasarty has noted that India "will manage with Australian cooperation if available and without it if necessary," hardly a healthy position for the bilateral relationship. In light of such statements, Roy believes that if Canberra wishes to move the relationship to the next level, impetus on the uranium export issue must come from Australia.

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